Enforcement of Debt (Scotland) Bill Required

By Alan McIntosh

John Wilson, MSP, Enforcement of Local Tax Arrears Bill proposal has opened up an important issue in Scotland regarding the enforcement and extinguishing of the obligations of debtors to repay their debts.

Scottish Debtors are currently at a disadvantage to debtors in other parts of the UK, in that debts can be pursued in Scotland for longer than they can in England, up to twenty years or more, once a court order or its equivalent has been obtained. In England, there is no automatic right to enforce a debt using legal enforcement (or distress) after 6 years. This encourages bad practice in Scotland, meaning bad debts can be held over people for an extraordinary long period of time. This encourages debt purchasers who buy debts, sometimes for pennies in the pound to then use the full force of the law to harass and persecute debtors who have reasonably assumed the original creditor has abandoned their right to pursue the debt.

John Wilson’s draft proposal concerned only local tax arrears and the pursuit of them using the summary warrant procedure, which only local authorities and Her Majesty’s Revenue and Customs can use. The debate, however, should be wider and look at the enforcement and extinguishing of a debtor’s obligations to repay all debts.

I would call for:

  • The prescriptive period for enforcing local tax arrears being reduced to five years;
  • Debtors having a statutory right of recall when served by a summary warrant by local authorities or Her Majesty’s Revenue and Customs Department;
  • That no court decree for payment of money, or summary warrant, should automatically be enforceable after five years, unless the creditor can show exceptional circumstances for not enforcing the debt earlier; and
  • That local authorities and HMRC,  who use summary warrant procedure, being allowed to enforce debts constituted by summary warrant  by executing and registering inhibitions on the property of debtors.

My full paper, The Enforcement and Extinguishing of Debtor Obligations in Scotland can be read here.

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